This invention relates to the field of water based epoxy resins. Prior art water based epoxy resins known to applicant generally utilize an emulsion and an organic solvent in their formulation. The presence of organic solvent provided a problem because of volatile solvents escaping into the atmosphere. Therefore, those skilled in the art have sought to provide a water based epoxy resin which would be free of the difficulties of using large amounts of organic solvents. In U.S. Pat. No. 3,998,771 a process is disclosed whereby a carboxylic acid is reacted with a primary amine to form an amide. This amide was then reacted in excess with an epoxy resin and the product was water dispeersed and further reacted with enough epoxy resin to stoichiometrically cure the resin. I have found that the initial step of reacting an amide with an epoxy resin before further reaction can be eliminated and an amide formed which will react directly with the entire amount of epoxy resin to form a cured product in one step.